NEW DELHI: Kotak Mahindra Bank Tuesday said its board has approved a proposal to increase foreign shareholding limit to 45 per cent from the existing 43 per cent.
"The board of directors of the bank has today approved increase in ceiling limit on the total shareholding of Foreign Institutional Investors/Foreign Portfolio Investors from the current limit of 43 per cent to 45 per cent with immediate effect," the bank said in a regulatory filing.
RBI had earlier asked the lender to pare promoter Uday Kotak's shareholding down gradually to 15 per cent by March 31, 2020. The bank was asked to cut Kotak's holding to 20 per cent of the paid up capital by December 2018 and further to 15 per cent by March 31, 2020.
As on December 31, 2018, Kotak held 29.72 per cent stake in the bank.
Uday Kotak, Vice Chairman and Managing Director of Kotak Mahindra Bank, earlier held 30.03 per cent stake. To bring his shareholding down, the bank in August 2018 had proposed to issue perpetual non-cumulative preference shares (PNPCS) to meet the said deadline, which was rejected by RBI.
Kotak Mahindra Bank then moved the Bombay High Court challenging the RBI's decision.
Stock of the bank closed at ₹1,235.75, down 0.44 per cent, on BSE.